Apple's topsy-turvy iPhone lineup

September 13, 2018

I started thinking about this yesterday, and originally was going to say crazy, as in irrationally expensive.William Schuth expresses this well:

My strategy had been to buy the mid-tier spec of the best iPhone offered. My iPhone 6S Plus cost me $849 at launch; the mid-tier XS Max is $1,249. That’s a whole Apple Watch worth of price inflation in three years.

The more I think about it, though, the more I think it’s not as simple as “Apple jacked up the price of the best phone a lot.” They did do that, no question. But they also made the “less-best” phones a lot better. In the iPhone 6, 6S and 7 years, the calculation was pretty straightforward:

Get the normal model

Pay extra for the Plus model, which got you a bigger screen, bigger battery, and better camera

Last year, though, the calculation changed a little:

Get the normal model (iPhone 8)

Pay extra for the iPhone 8 Plus, which got you a bigger screen, bigger battery, and better camera

Pay even more for the iPhone X, which got you Face ID, an OLED screen, a bigger battery, the Plus’s camera, and an edge-to-edge screen bigger than the iPhone 8 but not as big as the iPhone 8 Plus

This year, though, things are even weirder. All of these phones now have Face ID and an edge-to-edge screen. So:

Get the presumably normal model, the iPhone XS, which is “iPhone X with some bumps” (like most “S” model years)

Pay extra for the iPhone XS Max, which gets you a bigger screen and bigger battery (but the same camera)

Pay less for the iPhone XR, which still gets you a bigger screen and bigger battery than the iPhone XS, but drops back to an LCD screen and a slightly worse camera

So while Schuth’s heuristic ostensibly leads to the $1,249 XS Max, this isn’t the same scenario as we had with the iPhone 6, 6S and 7 where the difference between normal and Plus was obvious, nor is it like last year’s scenario, where the iPhone 8 and iPhone X were starkly different. This year, you have to really want that OLED screen and dual lens camera to make the XS worth it, and you have to really want the Galaxy Note-sized screen to make the XS Max worth it. In many (albeit not all) ways, the XR is the true successor to the Plus versions of years past, and it’s priced like it. The mid-tier XR is $849.

I wonder how this is going to affect iPhone sales next year. Does the ASP go up, because of the Max, or down, because of the XR? I’m betting the latter is at least possible. Unlike the iPhone 8 vs. the iPhone X, the XR provides a huge chunk of the ooh cool new shiny of the iPhone X, it’s available in unique colors, and it’s not a grimace-inducing price. (Well, no more than the Plus phones were, at the least.)

This is my upgrade year (I’m on an iPhone 6, no “S”), and it’s going to be a tough decision for me.